Table of Contents

• A Textbook Example of Bad Legislation

  • Replacing the "Revenue Neutral Rate" with a "Soft …

  • The Dangerous Protest Petition

  • The ASTRA Fund: An Empty Promise?

  • What Happens When the State Breaks Its Promise?

  • Rushed, Reckless, and Fundamentally Broken

A Textbook Example of Bad Legislation

The Kansas House-passed HB 2396 is a textbook example of bad legislation. Beyond the fundamental issue of local control (which Kansas lawmakers often claim to value, yet routinely disregard), this bill introduces a severe procedural flaw and likely violates equal protection for local voters.

At first glance, HB 2396 may have garnered support because it revives a Local Ad Valorem Tax Relief (LAVTR)-style program—the ASTRA fund—to help offset local property taxes. But this comes with unreasonable strings attached. After defunding the original program in 2003, the legislature officially killed it last year, keeping nearly $2 billion in tax relief that should have been distributed to cities. Given the state’s history of hostility toward local governments, cities and counties have every reason to doubt that lawmakers will uphold their commitments.

Supporters of the bill might argue that it includes accountability measures to ensure the state meets its obligations to offset local tax relief. While some attempts are made, these so-called safeguards are weak—and nothing prevents the legislature from exempting itself in future sessions. More on that in a moment.

Replacing the "Revenue Neutral Rate" with a "Soft Cap"

HB 2396 eliminates the “revenue neutral rate” (RNR) system, which required cities and counties to hold public hearings if they planned to collect more in property taxes than the previous year. The RNR process, despite its flaws, at least provided transparency. This bill replaces it with a so-called "soft cap" that limits how much local governments can increase property tax revenues.

Under this cap, cities and counties can only raise property tax revenues based on the Consumer Price Index (CPI) for Midwest Urban Consumers, new construction, and bond payments for bonds issued after July 1, 2025. But here’s the problem: the bill is unclear about how it affects bonds issued before this date. The legislature doesn’t appear to have considered this, meaning older general obligation bonds could effectively become “limited obligation bonds,” reducing their value and marketability. This would undermine cities' and counties' financial credibility, making municipal bonds riskier and costlier.

The Dangerous Protest Petition

If a city or county exceeds the cap after certifying its budget, there’s a 30-day window in which a “protest petition” can be filed to block the increase. All it takes is signatures from just 10% of the number of voters who participated in the last presidential election. Why 10%? The committee chair likely pulled this number from Kansas’ local initiative petition laws—but unlike those, this petition does not trigger an election. A mere 10% of voters can override the decisions of an elected governing body that represents the majority.

This is an egregious violation of equal protection—handing a vocal minority the ability to block tax policy, creating de facto minority rule on local budgets. One lawmaker even suggested lowering the threshold to 3%, which is absurd. Imagine: 3% of voters being able to dictate a city’s fiscal policy.

If the petition meets the signature requirement, the proposed tax increase is immediately canceled, and the city or county must revise its budget accordingly. There is no option for voters to weigh in at the ballot box—just an automatic override.

The ASTRA Fund: An Empty Promise?

For cities that don’t raise taxes above the cap, the state promises financial support from the ASTRA fund. Lawmakers set aside $60 million annually to distribute, weighted 65% by population and 35% by property valuation. An amendment to raise this to $100 million failed, meaning the funding remains woefully inadequate. The formula also disproportionately benefits wealthier, high-growth areas like Johnson County—leaving cities like Wichita, Lawrence, and rural communities behind.

What Happens When the State Breaks Its Promise?

Now for the kicker: what happens when ASTRA doesn’t meet its obligations?

The bill states that if ASTRA funding falls short, the protest petition rule disappears. But this safeguard is meaningless—by the time it becomes clear that ASTRA funds are insufficient, cities and counties will have already set their budgets to comply with the cap. The damage will be done. Local governments will face budget shortfalls with no way to adjust except to deplete emergency reserves—if they have any left. Essential services like road maintenance, public safety, and community programs will take the hit.

This isn’t just poor governance—it’s reckless. The Kansas Legislature has a long history of failing to deliver on local tax relief commitments. There is no reason to believe this time will be any different.

Rushed, Reckless, and Fundamentally Broken

It’s unclear how HB 2396 made it this far, but the timeline is telling:

• Introduced: February 27

• Committee hearing: March 4

• Passed out of committee: March 6

• Passed the House in "Emergency Final Action": March 7

A complex bill like this deserved thorough scrutiny, yet it was rushed through in a matter of days—approved by an overwhelming margin despite its glaring flaws. The legislature is moving at breakneck speed, adopting the Silicon Valley “move fast and break things” mentality. But unlike a tech startup, government has real consequences, and this bill will harm real people.

The Kansas Senate must do its job: stop this bill before it devastates local governments across the state.

1  House Bill 2396 undermines local government autonomy by imposing new restrictions on property tax revenue increases, subjecting them to protest petitions that could force budget cuts.